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About the program

The research focuses on several key knowledge gaps for maintaining economically and environmentally sustainable development.

How can improved access and increased efficiency in the management of energy and water resources contribute to accelerating economic progress and poverty reduction?

Since energy and water production and use give rise to local, regional, and global externalities, how can domestic policies and strengthened international cooperation among Bank client countries lessen the adverse impacts of these spillovers?

How can developing countries better mitigate the effects of climate change, and how can the prospects for rapid economic progress without unmanageable climate change be enhanced?

What urban development initiatives are most important in terms of infrastructure expansion, increased energy efficiency, and improved resilience?

1. Energy resources and markets

Energy is both a key factor in economic development and a central focus in addressing the environment and climate change. Current research topics include the economics of renewable energy and energy efficiency; energy and urban transportation; possibilities for “green stimulus” investment in the energy sector; and improved efficiency in public utility regulation.

These projects include work in Latin America, Africa, and East and South Asia, as well as support to World Bank pperations. New research projects are being developed to address the political economy of energy subsidy reform, and to continue work on the economics of access to renewable energy in rural areas.

2. Climate change

This research explores the major aspects of the climate change agenda: assessing the impacts of climate change and the implications for adaptation; mitigation of greenhouse gas emissions, including the rapidly-growing carbon finance business; and strengthening international approaches to meeting climate change challenges, in which the Bank plays a key role through the provision of information support and resource management to its clients and other stakeholders.

The effects of climate change on sea level, agriculture, water, and ecosystems have direct and significant implications for a wide range of investment and expenditure decisionsbeing made now in developing countries. Specific topics in this area include impacts of storm surges and changes in river flows on affected populations, and adaptation to climate change impacts in agriculture. Other research addresses the impacts on international river basin management treaties of changed water resource availability; and options for international measures to reduce the risk of “catastrophic” climate change.

In the area of greenhouse gas mitigation, this research builds on related energy research to initiate a new project based on country case studies to examine prospects for more rapid economic growth in developing countries while also reducing total emissions. Other research explores the functioning of current international markets for greenhouse gas emission credits through low-carbon investments in developing countries; and the extension of these market mechanisms to increase incentives for reducing deforestation. Connected with these projects is study of the macroeconomic consequences of revenue inflows from sale of carbon credits. These projects also provide insights for exploring how incentives for international cooperation in greenhouse gas emissions can be further strengthened.

3. Environment

This research focuses on two specific topics: health damages from indoor air pollution from smoky fuels, and how these serious hazards can be reduced; and hazards to the environment and workers from stocks of expired pesticides.

In addition, the team continues to carry out research and provide support to Bank operations on the economic valuation of a variety of environmental goods. Another continuing line of work explores how approaches to environmental improvement based on disclosure of information on environmental performance of enterprises, and community-based processes for establishing norms, can supplement more conventional policy designs. This portfolio of research has yielded concrete measures for improving environmental outcomes in a number of countries including Bangladesh, China, and Tunisia.

4. Water

A continued focus of work on water is integrated river basin management. A recently initiated project will review the performance of this approach in a number of African basins to identify barriers to improved outcomes and to suggest means for overcoming these barriers.

Other work has explored how the microeconomics of improved irrigation water management relates to improved country-wide macroeconomic performance. In addition, research is being developed on the factors influencing government policies and strategies in the context of shared international responsibility for water bodies.

5. Urban and regional development

This multi-year research program provides empirical evidence on the role of infrastructure in stimulating economic development, and how that role can be strengthened for accomplishing more rapid and inclusive economic progress.

As part of that broader initiative, research will develop methods to assess the impacts of inter-regional transport improvements on trade flows and economic performance. These methods will build on models from the new economic geography which are at the center of the WDR 2009: Reshaping Economic Geography.